Mehedi Hasan Shimul
CD Interest Calculator helps to calculate the total amount including compounded interest that we will receive when we invest the amount in Certificate of Deposit. In this article we will show you 2 easy and simple methods to create a CD Interest Calculator in Excel.
Download Practice Workbook
You can download the practice workbook from here.
What Is CD Interest?
CD Interest is the total amount which includes the investment along with compound interest. In compound interest the interest gets added to the capital after each period and makes a new capital. So the compound interest is greater than the simple interest.
2 Easy Methods to Create CD Interest Calculator in Excel
It’s quite easy to create a CD Interest Calculator in Excel. Here we will show you 2 very easy methods to create it.
Method 1: Use Excel FV Function to Create CD Interest Calculator
In this method we will use the FV Function of excel to make a CD Interest Calculator. The FV function gives the future value of an input number, it requires arguments consisting rate, nper (number of period for compounding), pmt (withdrawable amount), pv (investment). It gives compounded interest as result. The steps to do that are given below.
- First we make a dataset which should include investment amount, rate of interest, term in year and compounding period per year.
- Then we have to write the following formula in the cell where we want the CD interest. In our case the cell is C9.
=FV(C5/C7,C6*C7,0,-C4)
- Now we just need to press Enter. We will see the CD Interest in the cell.
Here, we used the FV Function for calculating the CD Interest,
- C5/C7 denotes the rate of interest. The rate of interest is in C5 but we divided it with the compounding period per year which is in cell C7.
- C6*C7 represents the cell for the number of times the interest will be compounded.
- 0 in the argument means we won’t take out any investment before the maturity period.
- Lastly -C4 denotes the cell for investment amount, it’s sign is negative because we will invest it.
- Hurreh! We have successfully created a CD Interest Calculator.
Read More: Simple Interest Formula in Excel (With 3 Practical Examples)
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Method 2: Make CD Interest Calculator Manually in Excel
Instead of using Excel function we can also calculate the CD Interest by using manual formula. For calculating the CD Interest we used the formula,
Interest = capital*(1+interest rate)^(number of interest compounding term)
The steps for doing this are given below.
- We need to create a dataset first. The dataset is similar to the dataset we used in method 1.
- After that, we need to write the formula given below in the cell where we want the CD interest to show up. In our case the cell is C9.
=C4*(1+C5/C7)^(C6*C7)
- Then we just need to press Enter.
Here, C4 cell contains the investment amount. C5/C7 denotes the amended interest rate and C6*C7 represents the number of times the interest would compound.
- That’s it! We have made a CD Interest Calculator Manually.
Read More: Create Post-Judgment Interest Calculator in Excel (With 2 Cases)
CD Interest Calculator for User
In the attached Excel file we have included a CD Interest calculator. All you need to do is input the data and you can find the CD Interest within moments.
Conclusion
CD Interest Calculator is a very useful tool to calculate the Compounded interest for invested amount by Certified Deposit. In this article we have shown 2 simple methods to create a CD Interest Calculator in Excel. If you face any problem following the steps, please let us know by commenting. For a similar article regarding Excel please visit our Exceldemy site.
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